Carmens Beauty Salon has estimated monthly financing requirements for the next six months as follows:

January	$	10,500	April	$	10,500
February		4,500	May		11,500
March		5,500	June		6,500

Short-term financing will be utilized for the next six months. Projected annual interest rates are:

January	9.0	%	April	16.0	%
February	10.0	%	May	12.0	%
March	13.0	%	June	12.0	%

a.	Compute total dollar interest payments for the six months. (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.)

Total dollar interest payments

$

b-1.	Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months? (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.)

Total dollar interest payments

$

b-2.

If long-term financing at 12 percent had been utilized throughout the six months, would the total-dollar interest payments be larger or smaller than with the short-term financing plan?

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